The Securities and Exchange Commission (SEC) in the Philippines has received a third application for its regulatory crypto sandbox. The sandbox is a programme designed to allow companies to test innovative financial products and services in a controlled environment. This new applicant is proposing a service aimed at enhancing the country’s information technology and capital market capabilities.

SEC Philippines Commissioner McJill Bryant Fernandez recently informed reporters that the commission has already given the green light to two previous crypto sandbox applications since the initiative launched in April of last year.

“We’re just waiting for the respective platforms to be completed because they need to develop their IT platform,” Fernandez said.

The “Stratbox” is the SEC’s regulatory sandbox. It offers participants a secure space to trial new business models, services, or products. The programme allows testing without immediate “real-world” consequences. A key condition is that participants must comply with Philippine law.

The SEC characterises it as a testing ground. They view it as particularly for innovations that can boost efficiency and improve risk management. These innovations can also combat fraud and promote financial inclusion.

The SEC formally introduced the Stratbox initiative under Memorandum Circular No. 9 Series of 2024.

While Commissioner Fernandez did not disclose the identities of the two approved participants, he confirmed the submission of a third application.

“We haven’t approved them yet,” Fernandez stated, “but we’re refining their proposal. We want to launch it soon.”

Adding to the programme’s scope, the SEC announced last month that it was accepting applications from Cryptocurrency Asset Service Providers (CASPs) for the Stratbox project. According to the regulator’s April 11 notice, eligible applicants include cryptocurrency exchanges, virtual asset custodians, and other related service providers.

The SEC previously issued a proposal for rules governing the registration of CASPs. This current move follows that earlier proposal. The rules aim to provide an additional layer of protection for investors exploring crypto assets.

The proposed regulations would mandate that individuals or entities offering crypto asset services in the Philippines must first obtain a licence from the SEC.

There are three key requirements for CASP registration under the proposed rules. Applicants must first be a stock corporation registered with the SEC. Secondly, they must have at least four Philippine-based staff members. Applicants must meet minimum capital requirements. Lastly, they must also submit a complete authorisation application.

SEC Chair Emilio Aquino expressed the hope that the SEC will release the final rules for CASPs before his term concludes on June 6.

Featured image: Edited by Fintech News Philippines, based on image by lcd2020via Freepik.